Indiana bill would lease out toll roads

| 1/13/2006

At the urging of Gov. Mitch Daniels, an Indiana state lawmaker has introduced a bill that would allow the state to lease the Indiana Toll Road to private investors – even foreign private investors.

The initiative is the biggest chunk of the governor’s 10-year, $10.6 billion statewide construction plan dubbed “Major Moves.”

To help pay for the plan, the state is preparing for offers by several private firms to lease the toll road for 75 years. Bids for the lease are due by Jan. 20.

“There’s a good chance that again, we’ll be offered money that we could not generate in this state without doubling the gas tax, or doing something equally unthinkable,” the governor told WISE-TV in Fort Wayne , IN.

In the next decade, the estimated $2 billion lease would help the state to cover a gap of $2.8 billion needed for road and bridge work throughout the state, as well as possibly pay for an extension of Interstate 69 from Indianapolis to Evansville .

In return for taking over operation and maintenance of the toll road, a private group would keep all of the toll money collected.

Congress encouraged such public-private partnerships in the Highway Bill, which became known as SAFETEA-LU after President Bush signed it in August 2005. The legislation authorizes $15 billion in tax-exempt bonds for privately financed highways and simplifies their environmental planning process.

Any leasing plans in Indiana would require approval from state lawmakers. With that in mind, Rep. Randy Borror, R-Fort Wayne, is carrying the governor’s plan in the General Assembly.

The House Ways and Means Committee is scheduled to discuss Borror’s bill – HB1008 – Tuesday, Jan. 17.

In addition to leasing roads, the bill authorizes privatizing airports, cargo ports and transit systems.

While lawmakers discuss privatization, plans are to go ahead and increase tolls along the 157-mile route by 72 percent for cars and ultimately 120 percent for large trucks

Daniels’ office reached an agreement with the state’s trucking association to phase in proposed toll increases on the Indiana Toll Road over four years.

If the fare increase is approved after public hearings in March, the rate for tractor-trailers traveling from the Illinois line to Ohio would rise from $14.55 to $18 this year. The rate would climb to $22.50 in 2007, $27.25, in 2008 and $32 in 2009.

Passenger vehicle rates for driving the same distance would rise from $4.65 to $8 this year. No other increases are planned.

In exchange for the phased-in truck rate, the Indiana Motor Truck Association has endorsed the governor’s transportation initiative.

The toll increases could generate as much as $770 million in 10 years.